What We Face Working Group Meeting of the Exploratory Project on Human Services and Social Change Prepared by Gary D. Bass OMB Watch 1742 Connecticut Ave., NW Washington, D.C (202)

The Budget & Tax Picture Today “We’ve got plenty of money in Washington, D.C., by the way.” President Bush in Louisville, KY February 26, 2004 “The tension is money. There’s not enough money.” Sen. Ted Stevens (R-AK), Chair Appropriations Committee March 3,

(Deficit excluding Social Security as % of GDP) Surplus Deficit % %

% %

1.8% of GDP = $207 Billion in 2004

The Longer-Term Budget & Tax Picture “I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.” Grover Norquist, Americans for Tax Reform June 25, 2003

Source: Steuerle, Carasso, Bishop, based on data from Gale, Orszag, and the Tax Policy Center.

Lost Federal Revenue Compared to Philanthropic Giving All figures in 2009 Dollars. Philanthropy source: American Association of Fundraising Counsel’s Trust in Philanthropy/Giving USA Assuming charitable giving keeps pace with the growth in the economy, giving in 2009 will be $341.4 billion. Charity would need to increase 142% to replace the lost federal revenue, assuming it continues to fund existing activities.

Source: Derived from Chart 12-5, OMB, 2005 Budget, Analytical Perspectives, page 194 As Baby Boomers Come of Age, the Deficit Explodes

The Long-Term Problem It’s a Revenue Problem. The tax cuts since 2001 cause long-term systemic problems. Additionally, there is a need to develop a fairer tax system with more revenue. Hard Choices Await Us. Even with additional revenue, some hard choices about spending priorities may be necessary. For example, some note that current health care policies are not sustainable over the long-term.

OMB Watch Tax and Budget Internet Survey A Look At Service Providers

Troubling Tax & Policy Issues to Service Providers 81% 82% 88% 91% 73% 63% 39% % To what extent do the following current federal tax and budget policy issues trouble you?

90% 91% Strong Support for a Tax & Budget Campaign Given limited time and resources and the fact that there are many other important issues, do you agree or disagree that it is time to launch a long- term offensive campaign around federal tax and budget issues?

Participation May Be a Challenge POSITIVENEGATIVE 90% of respondents say it is time to launch a campaign BUT 49% say they are unlikely to participate.

Even Though 49% say They Might Not Participate in a Campaign… 61% Say They Will Help Redistribute Information About the Campaign

Other Ways Groups Say They Would Participate

Getting Service Providers to Engage How important are the following items to get you or your organization engaged in a long-term campaign about federal tax and budget issues? 82% 79% 45%

Service Providers Significantly Differ From Other Respondents On… Funding for Tax/Budget Work. Service providers find funding as less of an incentive to get involved than others. Information about Effect of Federal Tax/Budget Policies on State/Local Funding. Service providers find such information as more of an incentive for involvement than others. Information about Effect of Federal Tax/Budget Decision on Substantive Issue Areas. Service providers find such information as more of an incentive for involvement.

Summary of Survey Even though Service Providers are heavily dependent on government resources, they are less troubled by tax cuts or privatization of government services than other nonprofits. Service Providers are similar to other nonprofits in levels of participation on tax and budget issues over the past year, as well as on objectives (with two exceptions) of what a long-term tax/ budget campaign should be.

Summary of Survey (Cont.) Service Providers present a number of contradictions: (a)They are significantly more concerned about resources for unfunded mandates than other nonprofits; (b)They are very concerned about federal budget cuts; (c)But they are more supportive of spending cuts to reduce the deficit than other nonprofits; (d)And they are significantly less worried than other nonprofits about attacks on the role of government or the need to demonstrate the value of a strong federal government.

Summary of Survey (Cont.) Service Providers differ from other nonprofits on incentives for engaging on federal tax/budget issues. Service Providers place information about impacts of federal issue on state/local funding as the most important incentive. Other nonprofits place developing common messages, themes and principles as the top incentive.